GCC Real Estate Markets Set for Continued Growth in Early 2026

Gulf real estate markets are expected to maintain growth through the first half of 2026, with Saudi Arabia, the UAE, and Kuwait leading activity, according to a new analysis by Kuwait Financial Center (Markaz). The report attributed the momentum to steady economic growth, improving liquidity, and a more accommodative interest rate environment across the Gulf Cooperation Council.

Developing a strong real estate sector remains a key part of GCC governments’ plans to diversify economies and reduce reliance on oil revenues. In Saudi Arabia, the Real Estate General Authority projects the property market will reach $101.62 billion by 2029, with a compound annual growth rate of 8 percent from 2024.

Markaz said the GCC market is expected to remain in an accelerating phase through mid-2026, supported by higher oil production, government spending on infrastructure and development projects, and policy rate cuts that boost borrowing and investment in residential, commercial, and industrial real estate segments.

In Saudi Arabia, the real estate sector showed strong performance in the second half of 2025, led by residential transactions and limited office availability. Residential sales increased 17.9 percent quarter-on-quarter in the third quarter, with Riyadh and Jeddah reporting notable price gains. Office vacancies in Riyadh remained extremely low at 0.5 percent, driving prime rent growth of 7.3 percent year-on-year. Demand was supported by the Regional Headquarters Program and growth in healthcare and technology sectors.

Saudi Arabia’s investment minister Khalid Al-Falih said more than 780 companies have relocated their regional headquarters to Riyadh, attracted by incentives such as a 30-year corporate tax exemption, withholding tax relief, and regulatory support. Markaz noted that despite a fiscal deficit of 3.7 percent of GDP in 2025, ongoing Vision 2030 capital expenditure is expected to sustain construction activity, supporting both commercial and residential real estate demand. Population growth, reaching 35.3 million by mid-2024, also continues to underpin housing needs.

The UAE’s real estate market also showed strong performance in 2025. Dubai’s transaction values rose 28.3 percent year-on-year to 554.1 billion dirhams ($150.88 billion), while Abu Dhabi recorded sales of 58 billion dirhams, up 75.8 percent. Transaction volumes in Abu Dhabi increased 42.3 percent to 15,800. Markaz expects the UAE market to peak in early 2026, with steady price and rental growth in both cities, although a medium-term period of moderation is possible. Dubai’s real estate sector contributed 8.2 percent to the emirate’s GDP during the first nine months of 2025, growing 6.7 percent over the period.

Kuwait’s market is expected to remain stable, with rising land prices and rental rates. Total property sales in the first three quarters of 2025 reached 3.04 billion dinars ($9.92 billion), a 26.9 percent increase year-on-year. Investment property sales grew 60 percent, while residential and commercial transactions rose 8 percent and 17.4 percent, respectively. Markaz projected Kuwait’s real GDP to grow 3.9 percent in 2026, supported by higher oil output, increased non-oil activity, and anticipated interest rate reductions, reinforcing demand for commercial and industrial real estate.

The report highlighted that across the GCC, strong fundamentals and government initiatives continue to drive growth, positioning the region’s real estate markets as key contributors to economic development.